Pensacola citizens and the city council had only three opportunities to discuss the budget of the Bayview Community Resource Center before the council voted to increase it from $6.05 million to $8.25 million on Sept. 20, 2017–two Local Option Sales Tax (LOST) workshops in January and March and a FY 2018 budget workshop in August.
City CFO Dick Barker first mentioned a $8.25 million budget at the January workshop. He gave few details, other the change was made after conversations with the community about the amenities wanted at the center. He said the final decision would be the council’s. When pressed by Councilwoman Sherri Myers, he said the figure was only “preliminary.” He said the mayor authorized the moving ahead with the LOST IV plan but agreed with Myers that the council hadn’t approved the new budget for the building.
This workshop is important, even though only two council members attended, because Barker will refer it in the August workshop.
Jan. 23, 2017 LOST Workshop Transcript
No quorum, only Gerald Wingate and Sherri Myers attended
Gerald Wingate: My next question was on the Bayview Center. You’re showing $8,250,000 on this report, and on the other report, you’re showing $6,000,000.
Dick Barker: That’s correct that the current estimate is the $8,250,000, and that’s based … Council’s aware we’ve hired an architect, council’s approved that. And in conversations with the community, and improvements and other amenities that they want there. So we have increased the budget amount. I understand on that particular project, and on your construction projects … Of course, the architect has to finish more meetings with the community, and also the final decision will be council, because the construction award would come back to council before any moneys are expended. But that is the current estimate that we’re using, and we did increase that.
Gerald Wingate: Okay, but if you were to update this, then your numbers would have to change somewhere on this … The 87 million, right?
Dick Barker: We did. The two million for that particular item did come out of the item we just spoke about, which was the … We reduced the economic development incentives by $2 million and put it into the Bayview Center.
Gerald Wingate: Okay, alright.
Sherri Myers: I’d like to stay on the subject of the Bayview Center if we may. [crosstalk 00:01:39]. So, the Bayview Center looks like it’s increased by about $2 million.
Dick Barker: Right, that’s right.
Sherri Myers: Okay, that’s pretty staggering in my estimation. Does that just include the building?
Dick Barker: Based on the conversations with the architect as I understand, it includes mainly the building, the amenities there, and the programs, and that type of thing that would be needed in order to operate. But then again, this is all preliminary, but instead of having to come back and ask for more funds, we put in what we know at this time, and it is council’s final decision.
Sherri Myers: Since starting, have you borrowed any money yet?
Dick Barker: No, ma’am. There has been conversation that different ones think we borrowed money; all you have done is set yourself up to borrow money and reimburse yourself from expenditures since we did the reimbursement resolution. So unlike a bond resolution, you did a reimbursement resolution, which would allow you to go back in time, should council decide to borrow funds, to reimburse yourself for those funds that you have expended.
Sherri Myers: Well, I’ve never seen this 8.2 million figure before.
Dick Barker: You have not. This is the first time based on the estimates that we have. And I will say that … And I know that Mr. … Eric has mentioned this, but each year you’ll be acting on, in the budget, the year that we’re in. So, in the 8.2 budget, we would have that projected 8.2 column … That’s what you would be budgeting. The rest is a plan, and that plan changes from time to time if priority changes, or if council sees priorities, but this is staff’s projection of what the needs are, and what the mayor has approved for us to move forward with this. But he has a budget; you aren’t approving that amount –
Sherri Myers: So basically, they could come up with two million more dollars, but for Bayview Community Center, but they can’t come up with money for Burgess Road.
Dick Barker: Well in this plan, Burgess Road is not identified separately. You know, Bayview was acted on by council.
Sherri Myers: Yeah, but not for this amount of money.
Dick Barker: That’s correct. So that amount increased, and, as Eric has said, there is money in the available balance at the end for Burgess Road.
Sherri Myers: For this price here, we built two community centers. Yours, and over at Legion Field. That’s, you know … In fact, that’s more than what it cost us to build two community centers.
Dick Barker: Yes, ma’am, you’re correct, but this was looked at, since it was going to be on the board, more like Corinne Jones-Sanders Beach.
Sherri Myers: Well how much did we spend for that?
Dick Barker: I believe it was about five or six million dollars. Of course, that was several years ago, and it depends on what programs you have at that center versus this.
Sherri Myers: Well I’ll tell you what: This is pretty staggering to me given the fact that there’s not even a community center in my district, and the closest one where they serve meals to seniors, where it’s highly used, Gull Point. Only 200,000 allocated for Gull Point. I mean, it’s outrageous. The only way I could support this is if you borrowed the money and put 1.6 million dollars into it for Burgess Road. I mean, I’m going to have to have some incentive to support this, is what I’m saying.
Dick Barker: I understand, but we’re going off of what council has approved, and that particular case, if council would approve Burgess Road –
Sherri Myers: Well they haven’t approved this.
Dick Barker: That’s correct.
Sherri Myers: They haven’t approved that either.
A second LOST IV workshop was held on March 20, 2017. Again no quorum was present. Barker was out to town. Council Executive Don Kraher fielded the council’s questions about the Bayview center budget. City Administrator Eric Olson and Budget Director Yvette McClellan were present but offered no input to the discussion.
Kraher said he believed the $2.2 million increase in the center’s budget was due to increased cost estimates from the contractor. However, the contractor hadn’t been selected. Kraher did confirm the $8.25 budget hadn’t been approved by council. Council President Brian Spencer said the cost hike was greater than the contingency and expected the mayor to bring an amendment to presented the council. No amendment was ever presented.
Kraher said the council could approve it if it was put in the LOST IV budget—and that is what happened in Sept. 2017.
March 20, 2017 LOST Workshop Transcript
No quorum, only Brian Spencer, Jewel Cannada Wynn and Sherri Myers attended
Council talks with the Council Executive Kraher about the Bayview center budget:
Don Kraher: Thank you. If I misspeak I’m sure the … either the city administrator or Yvette … Dick Barker’s out of town, so Yvette is filling in for Dick. But, there are, I think four items if I’m not mistaken, the council has already agreed to coming out of LOST IV, that being the Bayview Resource Center, the Fire Station #3, and the purchase of two fire apparatus.
Jewel Cannada Wynn: And Osceola.
Don Kraher: And which one?
Jewel Cannada Wynn: Osceola.
Don Kraher: Oh and the golf course.
Brian Spencer: Right. So, let’s go over those again please, Don. The Bayview.
Don Kraher: Bayview Resource Center.
Brian Spencer: Right.
Don Kraher: Fire Station #3, two fire apparatus, and the golf course clubhouse.
Brian Spencer: Right.
Sherri Myers: And what’s the total for all of that? The total for bay view appears to be over eight million dollars.
Don Kraher: Well, now it’s … This is another item that I was going to bring to councils attention and again I would have to differ to the financial people. When the council approved it, they approved it for 6.5 million, I believe. Or six … Yes. Six million 50 thousand, and it appears that the numbers in the current … The most recent proposal has moved it up to 8.25.
Sherri Myers: But how did it jump to almost $2 million?
Don Kraher: Well, again I’ll … I think that it jumped due to some of the increased cost estimates from the contractor is what I’m understanding.
Sherri Myers: Okay, so … But it … That increase has not been approved by council, right?
Don Kraher: That’s correct.
Sherri Myers: Okay, so we only approved, what, 6.5 million?
Don Kraher: No, 6.05. So, 6,050,000.
Sherri Myers: Okay. So …
Brian Spencer: Obviously, this is a very informal format. Keep going Sherri.
Sherri Myers: Well, I mean, I’m not in agreement to increase that.
Brian Spencer: Well I don’t think Ms. Myers, Council member Myers, certainly I understand that, and you have all the right to express it. Candidly, I don’t think that … I think you brought up a good point is, and it’s not at the workshop that we can take action, but it sounds to me like there might be an action item forthcoming for us to revisit this. Mr. Kraher, wouldn’t you … What is your understanding of previous council action, a vote, with a stipulated amount attached to a particular capital improvement project, and if there is now a expenditure increase that’s not within what we approved as a contingency amount, contingency fund which you’ll recall, council members, whenever we are approving contracts or agreement for construction, that includes a contingency for unforeseen increases, changes. So, obviously that amount is not in the … Doesn’t fall within the standard contingency percentage. Mr. Kraher, do you expect that that would be brought back to us by the mayor?
Don Kraher: I would think, although I would say that if it’s placed in the Pennies for Progress, in the LOST IV funding, and city council approves the amounts set forth in here, there’s the possibility that it could get moved up to that other amount without an individual item.
In August. CFO Barker blamed the rising costs of construction for the budget increase.
However, his argument doesn’t hold up when compared with Fire Station #3.
According to Caldwell Associates Architect’s contract, the cost of the work was $4,779,000 for the Bayview Center, exclusive of the architect’s compensation. The final design budget presented in September had the cost of work, excluding the architect’s fee, estimated to be $7,813,658:
Construction: $6,050,000
Miscellaneous: $325,000
Soft Costs: $395,000
Contingency: $467,051
Escalation to Jan 2018: $576,607
Cost of Work increase: $3,034,658, 63.5%
Meanwhile, Fire Station #3–the other major facility approved in the FY 2017 budget–didn’t have the same increase in cost. The Cost of Work in the Townes+Architects’ contract was $3,096,550.
Final Budget
Construction award: $3,194,000
Soft Costs: $203,000
Contingency: $159,700
Total Cost of Work, excluding architect’s fee: $3,556,700
Increase: $460,200, 14.9%
The increase in budget for the Bayview Center was due to more than rising construction costs. The final design was significantly different that the one contemplated when the council approved the FY 2017 budget for $6.05 million and when the contract for the architect was approved.
Aug. 1, 2017 Budget Workshop Transcript:
Quorum present
Dick Barker’s explanation of $8.25 million budget proposed for Bayview center:
“Then we had the Bay(view) Resource Center that approved, moving with that, at a $6-million number. And the questions come up in some of the individual meetings, why that is $8 million?
Well, that $8 million, from $6 million, was changed in January of 2017 in a presentation that staff made to council. And it really relates to what we’re seeing in the construction industry.
Our bids that we have put out…I think that one of the ones that you recall, we talked about Offshore Inland, the grant we received. I think we’re on the third bid of that for that facility because the bids are coming in higher than anticipated.
The construction industry has continued to increase, and that’s positive. All the growth in the city and the county, and the economy is good, but the cost that we’re seeing, that we originally thought for projects, has increased.
So in an abundance of caution, we’ve raised the Bayview Resource Center to that number. There was a workshop in May with the citizens and the architect, and so I can’t tell you what it’s going to come in at, but certainly that will come to council.â€
To learn more, read Inside the Bayview Center Cost Hike.